Positive on Sobha Developers in the real estate pack: Avinash Gorakshekar, Anagram Capital Ltd

Avinash Gorakshekar, Head Of Research, Anagram Capital Ltd, in a chat with ET Now talks about the realty stocks.

What do you make of the real estate pack as a whole?

The real estate pack definitely is more of a momentum space. Both as far as Anant Raj as well as a Unitech or a Sobha Developers is concerned, we are more positive on Sobha as well as Anant Raj because they have a more stable business model and a very strong land bank. But if you ask me what is the outlook for the next 12 months, still it is better to take a cautious call on the real estate sector and specifically on a Unitech or HDIL considering the fact that with a rising interest rate scenario in the very near term expected, whatever momentum is seen in the stocks currently is more of a trading call.

From a fundamental perspective, these companies still have a large amount of debt on their balance sheets and prices to a certain extent have been artificially floated. So an investor who wants to take a call should try to take a call only with 2 to 3-year horizon because real estate as a business is still a very opaque business and investors who want to make a fast buck can only do it the trading way.

From a medium term perspective, at least a 2-year horizon for reality stocks is essential because unless that is taken into account, one could not see the upside which an investor would look at.